In a perfectly competitive market a firm's rental rate for a machine (v) will be given by: v = P(r + d) where r is the prevailing rate of interest and d is the depreciation rate.In this formula P represents
A) the present market price of the machine.
B) the initial purchase price of the machine (assuming this differs from its present market price.
C) the price of the firm's product.
D) the depreciated value of the machine.
Correct Answer:
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